Boomers fuel RV and motorhome rebound

By Matthew Heimer

Many boomers may have doubts about their nest eggs, but at least one symbol of retirement prosperity is rolling along quite nicely, thank you very much. The Recreation Vehicle Industry Association says that it expects sales of RVs and motorhomes to reach 307,000 units in 2013, which would make this the industry’s best year since 2007. For the year to date, shipments to dealers are up 13% over last year’s levels, the association reported in its most recent sales update.

Bloomberg News

Bouncing back, with some help from the bank.

The mega-camper business all but collapsed during the last recession, thanks to the combination of economic upheaval and high gas prices, with sales falling 58% from 2006 to 2009. Shriveling credit markets played a role, too, with many lenders being unwilling to finance RV and motorhome purchases even as they freed up money for car loans in general. Indeed, some analysts say looser lending policies are a major factor behind the current rebound. A spokesman for Thor, the company that makes Airstream and other popular RV brands, tells Kyle Stock of Bloomberg BusinessWeek that buyers can now “get financing pretty easily up to about $150,000.” (A quick search online suggests that interest rates on RVs start at around 4.4%, compared with under 3% for the typical auto loan; I’m wondering which hedge funds and investment banks, in the hunt for yield, are now going long on trailer-backed securities.)

RV salespeople say that retiring “snowbird” boomers are their biggest customer group; the trade group doesn’t publish specific age breakdowns, but its literature suggests that ownership rates are highest among those between age 55 and 75. Speaking of snowbird stereotypes, the archetypal motorhome, in which the driver’s cabin and the living quarters are all on the same chassis –Jack Nicholson’s Winnebago in the movie “About Schmidt,” for example – accounts for only about 12% of RV sales. “Travel trailers” that get towed behind another vehicle, like the Airstream, make up the majority of the market. Some of those are quite modest, but price tags on the most luxurious models can top $90,000.

Story Conversation

About Encore

Encore looks at the changing nature of retirement, from new rules and guidelines for financial security to the shifting identities, needs and priorities of people saving for and living in retirement. Our lead blogger is editor Matthew Heimer, and frequent contributors include editor Amy Hoak, writer Catey Hill, and MarketWatch columnists Elizabeth O’Brien, Robert Powell and Andrea Coombes. Encore also features regular commentary from The Wall Street Journal retirement columnists Glenn Ruffenach and Anne Tergesen and the Director of the Center for Retirement Research at Boston College, Alicia H. Munnell.